Research on State Management Practices for the Rebalancing of State Long-Term Care Systems: Final Report

Transcription

1 Research on State Management Practices for the Rebalancing of State Long-Term Care Systems: Final Report Rosalie A. Kane Robert L. Kane Reinhard Priester Patricia Homyak Draft final Report Submitted to the Division of Advocacy and Special Initiatives, Centers for Medicare & Medicaid Services (CMS). Project Officer, Kathryn King June, 2008 Research Team from University of Minnesota Division of Health Policy & Management, School of Public Health Rosalie A. Kane Robert L. Kane, MD Reinard Priester Patricia Homyak Donna Spencer Lois J. Cutler Center for Community Integration School of Social Work K. Charlie Lakin Amy Hewett Terry Lum Researchers from Consulting or Subcontracting Organizations Robert M. Mollica, National Academy for State Health Policy Charlene Harrington & Martin Kitchener, University of California at San Francisco Charles Reed, Olympia, Washington Dann Milne, Denver, Colorado The overall Rebalancing Research was conducted through a Task Order under a CMS Master Contract between CMS and the CNA Corporation, Arlington, VA, and subcontracts and consultant agreements between CNAC and the various researchers. Rosalie A. Kane is the principal investigator from the University of Minnesota and Elizabeth Williams is the CNAC project director. This final report was prepared by Rosalie and Robert Kane, Reinhard Priester and Patricia Homyak with input and suggestions from others on the research team. The conclusions and opinions are those of the authors and do not necessarily reflect the views of CMS or any of its staff or of the eight participating states or their staff members.

2 Rebalancing Research Project, Final Report Table of Contents Part I: Overview of the Study and its Products Preface... iii Executive Summary...v Introduction...1 History and Goals of the Project... 1 Scope of Study... 2 Selection of Participating States... 3 Collaborative Relationship with Participating States... 4 Overview of Methods...5 State Case Studies... 5 Baseline State Case Studies Case Study Updates... 6 Final State case studies Topic Papers... 7 Quantitative Analyses for Chartbooks... 8 Research questions... 8 Study population... 8 Data sources Participant characteristics Case mix adjustment Summary of Products and Findings...12 State Case Studies Arkansas State Case Studies Florida State Case Studies Minnesota State Case Studies New Mexico State Case Studies Pennsylvania State Case Studies Texas State Case Studies Vermont State Case Studies Washington State Case Studies Baseline Executive Summary Report State Organization Local organization and access Values and vision Service array and funding strategies Stakeholder and advocacy involvement Consumer direction Real Choice System Change & other grant funding Quality initiatives Better information for consumers Reducing institutions and transition programs Major system changes Rebalancing Research Project, Final Report, page i

3 Rebalancing Research Project, Final Report Quantitative markers of rebalancing Update Case Study Report Topic Papers Topic Paper Number 1. Consumer Advocacy Topic Paper Number 2, State Organization Topic Paper Number 3, Managed Care Topic Paper Number 4, Informed Decision-Making Topic Paper Number 5, Future of the Nursing Home Topic Paper Number Six. Community Residential Settings Quantitative Chartbooks Chartbook Number 1. Medicaid expenditure data in Chartbook Number 2, Medicaid expenditure data in Chartbook Number 3, Medicaid expenditure changes from 2001 to Chartbook Number 4. Medicare and Medicaid expenditure data Chartbook Number 5, Effects of Case Mix Adjustment on Medicaid Expenditures Chartbook Number 6, Assessment Data from Three States General Conclusions from Special Quantitative Studies Part II: Conclusions and Recommendations Conclusions...52 Evidence of Rebalancing Patterns of Expenditures Management Strategies State Organization and Structure Array of services Financing and payment strategies Managed care Downsizing and changing nursing homes Transition programs Obstacles to rebalancing Long-term strategies Recommendations General principles Recommendations for States Undertaking Rebalancing Recommendations for State Legislatures Recommendations for consumer advocates Recommendations for CMS and other Federal Agencies List of Figures Figure 1: Absolute Changes in Clients and Expenditures by State and program, 2000 to Figure 2a: Ratio of Medical Care to LTSS Medicaid Payment per Person Month in Waiver Groups in 2002 for non-dual eligible Fee-for-Service Enrollees Figure 2b: Ratio of Medical Care to LTSS Medicaid Payment per Person Month in State Plan Group 2002 for non-dual eligible Fee-for-Service Enrollees.. 56 Rebalancing Research Project, Final Report, page ii

4 Rebalancing Research Project, Final Report Preface In 2003, Congress directed the Centers for Medicare & Medicaid Services (CMS) to commission a study in up to 8 States to explore the various management techniques and programmatic features that States have put in place to rebalance their Medicaid long-term supportive services (LTSS systems and their investments in long-term support services towards community care. The States of Arkansas, Florida, Minnesota, New Mexico, Pennsylvania, Texas, Vermont, and Washington participated in the resulting 3-year collaborative study (hereafter called the Rebalancing Research). For the study, CMS defined rebalancing as achieving a more equitable balance between the proportion of total Medicaid long-term support expenditures used for institutional services (i.e., Nursing Facilities [NF] and Intermediate Care Facilities for the Mentally Retarded [ICFs-MR]) and those used for community-based supports under its State Plan and waiver options; in an LTSS system that offers a reasonable array of balanced options, particularly adequate choices of community and institutional options. The study, which was extended 9 months from the original timelines, took place between October 2004 and June 2008, was a longitudinal study with qualitative and quantitative components that utilized a wide variety of methods. Among the many products generated are: 8 baseline case studies for each of the 8 states covering a period up to July 2005 an 8-state update report, covering the period from August 2005 to July final cases studies for each of the 8 states, covering the period until December cross-cutting Topic Papers dealing with themes in Rebalancing 6 Quantitative Chartbooks This final report has two purposes: 1) to summarize the methods, products and findings of this complex project, and provide a roadmap to its products; and 2) to suggest conclusions and recommendations that might be helpful to State officials, legislators, advocates, and providers and CMS on approaches to increase and improve long-term supports in the community for people with disabilities of all ages, enhance participant choice, and reduce reliance on institutions. We are grateful to the liaisons to the study from the participating states: Herb Sanderson, Arkansas Division of Aging and Adult Services; Beth Kidder and Wendy Smith, Florida Agency for Health Care Administration; LaRhae Knatterud, Minnesota Department of Human Services; Deborah Armstrong, formerly New Mexico Department of Aging and Long-Term Services; Dale Laninga, formerly Pennsylvania Governor s Office on Health Care Reform and Mike Hall, Pennsylvania Assistant Secretary for Long-term Living; Marc Gold, Texas Department of Aging and Disability Services; Patrick Flood and later Joan Senecal, Vermont Department of Aging and Independent Living; and Kathy Leitch, Washington Aging and Disability Services Division: all were responsive, gracious, and thoughtful despite hectic schedules and multiple other demands on their time. We also thank the staff in each State who worked with us to provide State data and finder files to link with Medicaid data, and especially thank Glenn Mitchell of the Florida Policy Exchange Center, University of South Florida in Tampa for his special help with data analysis. Rebalancing Research Project, Final Report, page iii

5 Rebalancing Research Project, Final Report Many CMS officials have provided us with helpful critique and comment, including Melissa Hulbert, William Clark, Karen Armstrong, Ronald Hendler, and Susan Hill, and especially our three successive CMS project officers Mary Beth Ribar, Dina Elani, and Kathryn King who have been unfailingly facilitative and have provided us with many insightful comments and suggestions. All conclusions are those of the researchers and do not necessarily reflect the opinions of any officials at CMS or the participating States. Rosalie A. Kane, Project Director Rebalancing Research Project, Final Report, page iv

6 Rebalancing Research Project, Final Report Executive Summary This final report reviews the goals and methods of a Congressionally mandated four-year qualitative and quantitative study of State strategies for their long-term supportive services (LTSS) undertaken to change the balance of utilization and expenditure in the State Medicaid programs for all populations to increase utilization of and expenditures on home and community based services and reduce utilization of and expenditures on institutions. The study activities took place between October 2004 and June 2008 in collaboration with eight participating States: Arkansas, Florida, Minnesota, New Mexico, Pennsylvania, Texas, Vermont, and Washington. Findings in the products of the Rebalancing Research are discussed in Part I. These products include: State case studies conducted at three points in time, resulting in 18 separate reports, which are each summarized on pp ; 6 cross-cutting topic papers, which are each summarized on pp ; and 6 Chartbooks with special quantitative analyses, which are summarized on pages In general we conclude that it is possible for States to substantially alter the balance of their LTSS towards community without reducing the quality of overall services or dramatically increasing overall costs. States have different histories and circumstances, and no single management strategy will apply to all States. However, management strategies do make a difference in a State s ability to rebalance their LTSS systems. Part 2 of this report provides conclusions related to management practices and recommendations. Findings on Management Strategies Vision statements. States should develop a vision statement for LTSS that emphasizes choice and independence; the vision statement should be enunciated in one or more State statute and incorporated into the vision of relevant State agencies. Such vision statements are best to be prominent in all related print and electronic materials, and State employees need training on the meaning of the vision and how to make it operational. Operational consolidation. Consolidate operations related to all populations needing LTSS into a single State agency; consolidate functions such as budgeting & planning, operations, and quality assurance in a single State agency; the entity responsible for LTSS should control both the institutional and HCBS budgets. Expedited eligibility processes. Work towards expedited eligibility processes or even presumed eligibility; ensure the potential consumers get necessary information about choices at the right time. Final Report for Rebalancing Research Project, page v

7 Rebalancing Research Project, Final Report Eliminate waiting lists. Avoid wait lists for HCBS services, particularly if no wait is needed for institutional services; if wait list exist for waiver services, try to use State-funded services for seamless gap-filling. Array of services. Develop a varied array of services, beginning with a capacity for personal care and/or attendant services; build flexibility into the services themselves rather than require multiple services to fulfill particular tasks; redefine case management services to meet current system needs; include a wide variety of residentially-based services in the array; examine nurse practice acts to assure that nurses can perform teaching roles and delegate nursing tasks to unlicensed assistive personnel. Consumer-directed services. Consumer-directed services are an important building block in a rebalanced LTSS system and should be incorporated in both waivers and State Plan Personal Care Option Services. States have found it feasible for family members to serve as paid caregivers in such a system. Stakeholder roles. Develop and provided staff support for a stakeholder group, largely comprised of consumers, and encourage a visible role for this group; in addition, develop stakeholder groups for various programs and initiatives. Information infrastructure. Develop an information infrastructure to support HCBS services with an ability to track experiences of groups of participants with various needs and an ability to track the performance of service providers; develop reporting hotlines and incident reporting systems; make information on quality readily available to consumers; develop feedback on quality directly from consumer surveys or interviews with consumers. Role of managed care. Managed LTSS, often introduced as part of overall managed Medicaid services can be used to encourage community care and rebalancing if: the State is clear on incentives for community care; a mechanism is available to ensure that consumer choice of living situation is respected, and consumers are offered consumer-directed models; and assisted living settings are not over-utilized. Managed LTSS is more likely to carry incentives for HCBS if the providers are at financial risk for nursing-home care and/or incur penalties when nursing home residents dis-enroll. Numerical goals for nursing homes. Develop numerical goals for nursing home Medicaid expenditures, and, if possible, build them into budget forecasts; develop reimbursement incentives for nursing homes to downsize, close, and/or diversify into community services; for States with large ICF/MRs, develop incentives for them to close and perhaps become HCBS providers instead. Transition programs. Develop specific programs to assist those who wish to make transitions from institutions; fund and train a group of relocation specialists to work with transitioning individuals; build transition expenses, including relocation specialist services and expenses for deposits and furnishings into waivers or State-funded programs; ensure an unbiased outside source of information about community alternatives for persons living in institutions. Final Report for Rebalancing Research Project, page vi

8 Rebalancing Research Project, Final Report Long-range strategies. While working on immediate issues that might result in better rebalancing statistics, also consider long-range needs to sustain a system flexible and highquality HCBS services are available. Examples include ways to build a high quality labor force for LTSS, efforts to develop livable communities (including transportation systems), and various efforts to increase the stock of affordable, accessible housing, and to make prosthetic equipment available. Such long-range planning may be undertaken as publicprivate partnerships. Recommendations General principles. Institutions, particularly nursing homes, should not be the standard against which other care is measured. Instead the primary thrust should be to keep people in the community, in their own homes if possible, but in a home in any event. Some degree of congregate living may be required to facilitate efficient delivery of services, but it should not come at the expense of depriving a person of a livable home. Infrastructure is needed. One level of infrastructure is administrative. Fragmentation impedes progress and efficiency. Some degree of programmatic coordination, ideally a centralized administration that controls funding and the full range of services for the full gamut of the LTC population should facilitate effective allocation of resources. Accountability is also central and extends beyond regulation to a more proactive approach that identifies goals and rewards their achievement at the individual and program level. Accountability for meeting individual consumer preferences would be part of the incentive system. Payments should be used to re-enforce established goals. The current approach of paying for services must be tempered towards paying for accomplishments, even accomplishments subjectively experienced by the consumer. Regulation has transformed the nursing home industry but at a cost. It has eliminated some (but certainly not all) woefully substandard care but it has failed to create a positive climate for improvement. We should not reinvent a heavy regulatory approach to LTSS based on nursing home regulations. Recommendations for States Undertaking Rebalancing. 1. States should adopt a set of core values that might include the following: Persons of all ages needing LTSS and their families are entitled to maximum feasible choice of and participation in selecting service providers and living settings; Persons of all ages with disabilities have the right to choose and/direct a care plan involving managed risk, in exchange for the advantages of personal freedom. Such Final Report for Rebalancing Research Project, page vii

9 Rebalancing Research Project, Final Report risk taking presumes access to good information about the benefits and risk implications of alternatives. The array of public service options and individual client choices may be bounded by reasonable considerations of costs. Quality of life is as important as quality of care. 2. States should work towards integrating services for all LTSS populations in the same agency, and towards achieving a unified budget for HCBS and institutional services. 3. A State LTSS system needs a fast, timely and standardized way to assess financial and functional eligibility. 4. A State LTSS system needs a high quality, accountable case-management system with capacity to provide information, assistance, and oversight for consumers. 5. A State LTSS system needs a fair rate setting and contracting process for providers. 6. A State LTSS system needs a process for assuring quality oversight throughout the system. 7. A State LTSS system needs a sophisticated group of consumers/families and providers who advocate for the LTSS system. 8. State lead agencies for LTSS should build a quality system by: establishing programs in which substantial samples of individuals are surveyed to determine the outcomes of the institutional and community supports they receive; analyzing those data to determine the settings and individuals for whom outcomes are relatively less well achieved; reporting those outcomes publicly; establishing quality improvement programs that address types of service, locations or groups of services recipients whose outcomes are less than should be achieved; and instituting or proposing legislative policy and program changes in areas in which predictors of less favorable outcomes can be manipulated by policy. 9. The relevant State agency should review all regulatory language for any group residential settings to identify and remove requirements that force consumers to leave if they need 24-hour nursing or otherwise reach a certain level of disability. Final Report for Rebalancing Research Project, page viii

10 Rebalancing Research Project, Final Report Recommendations for State Legislatures: State legislatures should: 1. Set specific budget targets for decreased expenditures for institutional services and increased expenditures for home and community services with established incentives to meet/disincentives to miss those targets; 2. Create housing subsidies for individuals in the community for the cost of the housing subsidy if the cost of community supports needed to live in that housing and the subsidy are equal to or less than the cost of otherwise necessary institutional care. 3. Provide such subsidies at enrollment in Medicaid LTSS with simultaneous application for a HUD Section 8 housing voucher and maintain the state subsidies only until the individual(s) can claim a HUD Section 8 voucher or other federal subsidized housing. Recommendations for consumer advocates. Consumer advocates should: 1. Monitor and publicize state performance in comparison to other states in key indicators of rebalancing (e.g., decreasing rates of institutionalization, relative balance of institutional vs. home and community services, relative balance and trends in state expenditures for institutional and home and community services, rates of competitive employment for persons with disabilities; independent housing rates for persons with disabilities; and so on.) 2. Obtain and publicize data or findings on variations in outcomes (choices, employment/earnings, community participation, etc.), satisfaction and expenditures for factors associated with rebalancing concretely and broadly framed (institutions vs. home and community supports, setting size, own home v. assisted living, consumer directed vs. traditional budgeting, care planning vs. person-centered planning). 3. Monitor the enforcement of the Olmstead decision in their States. Recommendations for CMS and other Federal Agencies. CMS should consider: 1. Providing grants to states as incentive to consolidate of all their LTSS programs in one place in state government. 2. Providing a better Title 19 match for Home and Community Services as an incentive for states to provide this type of service. 3. Intervening in states that are making little or no progress in fulfilling the promises of Olmstead. Create potential benefits for progress (and potential detriments for continued lack of progress). For example, the FFP could be reduced by 1% per year for institutional services and increased by 1% per year for community supports for a period of time. 4. Engaging with HUD in a demonstration within targeted communities (ones in which the cost of housing exceeds what can be purchased with the standard SSI and SSDI cash Final Report for Rebalancing Research Project, page ix

11 Rebalancing Research Project, Final Report payment) of target housing subsidies linked to new Medicaid LTSS recipients and/or participants coming out of institutions. 5. Establishing partnerships with financial incentives for states to utilize a well-developed, standardized program of outcome assessment for substantial random samples of institution and community service recipients. In such a plan CMS not only contributes to states obtaining state data for their own analysis purposes, but it integrates the data sets created to establish a multi-state means of studying the effects of various supports for persons of various characteristics living in various settings. 6. Encouraging States to expand state-plan coverage to include more HCBS services. 7. Encouraging the kind of federal statutory and regulatory changes needed so that a broad array of LTSS services could be available for all eligible Medicaid participants without regard to the artificiality of nursing-home certifiability. (This would include variants of the Vermont Choices for Community Care program). 8. Exploring the feasibility and desirability of and the needed statutory and regulatory changes for uncoupling room and board from services in nursing homes to level the playing field. Recommendations for States Undertaking Rebalancing. 1. States should adopt a set of core values that might include the following: Persons of all ages needing LTSS and their families are entitled to maximum feasible choice of and participation in selecting service providers and living settings; Persons of all ages with disabilities have the right to choose and/direct a care plan involving managed risk, in exchange for the advantages of personal freedom. Such risk taking presumes access to good information about the benefits and risk implications of alternatives. The array of public service options and individual client choices may be bounded by reasonable considerations of costs. A State LTSS system should incorporate the belief that quality of life is as important as quality of care. 2. In a State LTSS system no service should be viewed as more important than another; nursing homes are no more or less important than any other service even though they are mandated in Medicaid. 3. In a State LTSS system, States should work towards integrating services for all LTSS populations in the same agency, and towards achieving a unified budget for HCBS and institutional services. Final Report for Rebalancing Research Project, page x

12 Rebalancing Research Project, Final Report 4. A State LTSS system needs a fast, timely and standardized way to assess financial and functional eligibility. 5. A State LTSS system needs a high quality, accountable case management system with capacity to provide information, assistance, and oversight for consumers. 6. A State LTSS system needs a fair rate setting and contracting process for providers. 7. A State LTSS system needs a process for assuring quality oversight throughout the system. 8. A State LTSS system needs a sophisticated group of consumers/families and providers who advocate for the LTSS system. 9. State lead agencies for LTSS should build a quality system by: establishing programs in which substantial samples of individuals are surveyed to determine the outcomes of the institutional and community supports they receive; analyzing those data to determine the settings and individuals for whom outcomes are relatively less well achieved; reporting those outcomes publicly; establishing establish quality improvement programs that address types of service, locations, or groups of services recipients whose outcomes are less than should be achieved. instituting or proposing legislative policy and program changes in areas in which predictors of less favorable outcomes can be manipulated by policy. 10. The relevant State agency should review all regulatory language for any group residential settings where Medicaid waiver services are received to identify and remove requirements that require consumers to leave if they need 24-hour nursing or otherwise reach a certain level of disability. Recommendations for State Legislatures: State legislatures should: 1. Set specific budget targets for decreased expenditures for institutional services and increased expenditures for home and community services with established incentives to meet/disincentives to miss those targets; 2. Create housing subsidies for individuals for home the cost of the housing subsidy plus the cost of community supports needed to live in that housing are equal to or less than the cost of the otherwise necessary institutional care. 3. Provide such subsidies at enrollment in Medicaid LTSS with simultaneous application for a HUD Section 8 housing voucher and maintain the state subsidies only until the individual(s) can claim a HUD Section 8 voucher or other federal subsidized housing. Final Report for Rebalancing Research Project, page xi

13 Rebalancing Research Project, Final Report Recommendations for consumer advocates. Consumer advocates should: 1. Monitor and publicize state performance in comparison to other states in key indicators of rebalancing (e.g., decreasing rates of institutionalization, relative balance of institutional vs. home and community services, relative balance and trends in state expenditures for institutional and home and community services, rates of competitive employment for persons with disabilities; independent housing rates for persons with disabilities; and so on.) 2. Obtain and publicize data or findings on variations in outcomes (choices, employment/earnings, community participation, etc.), satisfaction and expenditures for factors associated with rebalancing concretely and broadly framed (institutions vs. home and community supports, setting size, own home v. assisted living, consumer directed vs. traditional budgeting, care planning vs. person-centered planning). 3. Monitor the enforcement of the Olmstead decision in their States. Recommendations for CMS and other Federal Agencies. CMS should consider: 1. Providing grants to states as incentive to consolidate of all their LTSS programs in one place in state government. 2. Providing a better Title 19 match for Home and Community Services as an incentive for states to provide this type of service. 3. Intervening in states that are making little or no progress in fulfilling the promises of Olmstead. Create potential benefits for progress (and potential detriments for continued lack of progress). For example, the FFP could be reduced by 1% per year for institutional services and increased by 1% per year for community supports for a period of time. 4. Engaging with HUD in a demonstration within targeted communities (ones in which the cost of housing exceeds what can be purchased with the standard SSI and SSDI cash payment) of target housing subsidies linked with a) new Medicaid LTSS recipients and/or b) persons coming out of institutions, so that new community HCBS recipients for whom the cost to the federal government for both subsidized housing and home/community supports would be less than the cost of an institutional placement would receive access to a HUD or HUD-liked Section 8 voucher simultaneous to the available of the community supports they need to live in their subsidized housing. 5. Establishing partnerships with financial incentives for states to utilize a well-developed, standardized program of outcome assessment for substantial random samples of institution and community service recipients. In such a plan CMS not only contributes to states obtaining state data for their own analysis purposes, but it integrates the data sets created to establish a multi-state means of studying the effects of various supports for persons of various characteristics living in various settings. 6. Encouraging States to expand state-plan coverage to include more HCBS services. Final Report for Rebalancing Research Project, page xii

14 Rebalancing Research Project, Final Report 7. Exploring the kind of federal statutory and regulatory changes needed so that a broad array of LTSS services could be available for all eligible Medicaid participants without regard to the artificiality of nursing-home certifiability. (This would include variants of the Vermont Choices for Community Care program). 8. Exploring the feasibility and desirability of and the needed statutory and regulatory changes for uncoupling room and board from services in nursing homes to level the playing field. Final Report for Rebalancing Research Project, page xiii

15 Rebalancing Research Project, Final Report Introduction Research on State Management Practices for the Rebalancing of State Long-Term Care Systems: Final Report Part I. Overview of the Study and its Products History and Goals of the Project In 2003, Congress directed the Centers for Medicare & Medicaid Services (CMS) to commission a study in up to eight states to explore the effects of various management techniques and programmatic features that states have put in place to rebalance their Medicaid long-term supportive services (LTSS) systems. 1 For the study, CMS defined rebalancing as reaching a more equitable balance between the proportion of total Medicaid long-term support expenditures used for institutional services and those used for community-based supports. The language of the Congressional request specified that the study should be both qualitative and quantitative in nature and should consider how States could meet the challenge of shifting the balance of their efforts away from institutional care and towards community care while ensuring quality in both the new community services and the remaining institutional services and avoiding a large increase in overall expenditures. A 3-year study was awarded to University of Minnesota and its collaborators (through a master contract held by the CNA Corporation) in October 2004 (hereafter called the Rebalancing Research Project) and, with a 9-month extension, was completed in June The study progressed in parallel with many CMS activities and projects funded under the Real Choice System Change (RCSC) Grants that followed the 1999 Supreme Court Olmstead decision and the 2001 Presidential New Freedom Initiative. During the years following the 1 Various States use different terms and acronyms for long-term supportive services and the populations served, and the predominant use of language has changed even over the last four years. For consistency in this final report, we use the term long-term supportive services (LTSS) rather than long-term care. Final Report for Rebalancing Research Project, page 1

16 Rebalancing Research Project, Final Report initiation of the Rebalancing Research, CMS further clarified that a balanced LTC system offers individuals a reasonable array of balanced options, particularly adequate choices of community and institutional options and emphasized the pivotal importance of incorporating personcentered planning and consumer-directed services into any rebalanced LTSS. Similarly, over our project period, CMS increasingly signaled to States an expectation that consumer stakeholders would have meaningful direct roles in program development, monitoring, and evaluation. e incorporated into our work plans and priorities an effort to discern management strategies that States use to achieve maximal consumer direction by participants in LTSS programs, and ongoing meaningful participation of consumer stakeholders at the policy and program levels. Scope of Study The contractor for this study was explicitly asked to take a broad view of the project and to consider all people of any age with disabilities of any type physical, intellectual, psychological who are served under Medicaid and Medicaid waivers. Initially we perceived that State management practices fell into at least four types: Strategies to improve access to services. At the outset, we understood that strategies to improve access could include provision of information to consumers, advocates, and decision advisors; speeding the process of both financial and functional eligibility; developing equitable and consistent availability of services across the entire state; improving the referral and assessment processes. Strategies to increase the array of services and their quality. At the outset we understood that these strategies included developmental efforts to create a service capacity; the encouragement of flexible options; ensuring labor force development for LTSS; developing information systems and Information Technology platforms to support decentralized community services; developing quality monitoring systems that would allow States to confidently increase investments in community care; and systematic ways to create incentives for institutional services providers to downsize and/or diversity their efforts. The service capacity might also depend on strategies for how to define and use Medicaid Home and Community Based Services (HCBS) waivers and structure optional state plan services. Strategies related to budgeting and payment. At the outset we understood that these strategies could include ways to manage State LTSS budgets so that money could be Final Report for Rebalancing Research Project, page 2

17 Rebalancing Research Project, Final Report moved from institutional to home and community based services (HCBS) programs; capitated managed care strategies; and reimbursement incentives. Strategies that involve linkages to other governmental and private sector programs. The study focused on Medicaid programs and on expenditures under Medicaid State Plans and under HCBS Medicaid waivers, but it also took into account how States effectively combined Medicaid funding with various federal funding streams for particular programs (e.g. for education, aging services, and rehabilitation services) and with State revenues. To maximize Medicaid s effectiveness as a vehicle for Rebalancing, States can use a variety of collaborative strategies. Potential collaborating entities varying according to various target populations and age groups but could include health care (both physical and behavioral); physical rehabilitation, vocational rehabilitation, and Centers for Independent Living programs; housing programs; Older Americans Act programs and the so called Aging Network of State Units on Aging and Area Agencies on Aging; manpower development programs; and educational programs at all levels (preschool, elementary and high school, college). Although the major study focus was on HCBS programs, our purview also included activities related to meeting needs of, empowering, and ensuring high quality services to residents in institutions. Regardless of how an LTSS system is balanced between investments in HCBS and institutional services, States must meet quality goals for both sectors and will encounter tradeoffs in the use of State resources to manage all LTSS programs in the community and institutions on behalf of people with all kinds of disabilities and of all ages. Selection of Participating States Eight States participated in this collaborative project. They were: Arkansas, Florida, Minnesota, New Mexico, Pennsylvania, Texas, Vermont, and Washington The selection of these 8 participating states followed an orderly process. The primary criteria established by CMS were that each selected state must be in the process of rebalancing LTC systems towards community care and that the states, collectively, must illustrate a range of management techniques across the whole spectrum of HCBS target populations and a range of state circumstances (e.g., larger or smaller, more or less populous, stronger or weaker county government structure, geographic variation, demographic variation, policy variation, service Final Report for Rebalancing Research Project, page 3

18 Rebalancing Research Project, Final Report structure variation. We excluded Alaska and Hawaii for practical reasons and because of their limited generalizability) and, at CMS request, Oregon and Wisconsin because they were the subject of recent or ongoing attention. We developed comparative information on the other States using easily available information and our own knowledge of policy directions for LTSS. With input from CMS, we narrowed the possible choices to 20 and grouped them to display what each would bring to the Rebalancing Research effort. Collaborative Relationship with Participating States With input from CMS, we issued invitations to 8 States; all invited States agreed to participate. We identified a liaison in each state (each a high level official in the state s governmental entity most responsible for LTSS) to be the project s primary contact. The 8 state liaisons formed the project s state steering committee to give collective input into the work. Later when we began collecting quantitative data from each State, we also identified one or more point persons to help us identify and understand the nature of each State s data collection systems and data repositories. The Rebalancing Research was a collaborative effort with the participating States. It was not structured as a formal evaluation, nor was it based on examining the State s LTSS programs against any normative views on what constitutes the correct balance. Rather, the study was an endeavor with the participating states to gain insights on how and what kind of goals States set for LTSS, and what administrative arrangements, policy directions, service packages, and management activities had shown promise to them. Final Report for Rebalancing Research Project, page 4

19 Rebalancing Research Project, Final Report Overview of Methods State Case Studies State case studies were performed at three time periods, resulting in baseline, one-year follow-up and final case studies for each state. The case studies entailed both qualitative and quantitative analyses. Baseline State Case Studies. The baseline case studies presented the current situation as of 2005 in the context of a presentation of the history of each State s development of LTSS from about 1970 forward. To prepare the baseline state-specific reports, we reviewed voluminous information on each state (including relevant state legislation and regulations, policy statements and manuals, assessment tools, relevant commission and task force recommendations, and special studies). We mapped the structure of state policy-making and operations related to LTSS, and prepared a historical timeline of major policy and programmatic milestones. In discussion with the State liaison we created lists of key consumer and provider stakeholders and identified who would best be able to provide us with quantitative data on supply, users, and costs of services. Members of the quantitative team conducted telephone interviews with the identified persons so that they could further understand the data available in that State. We created a standard context for each State s activities, drawing upon nationally available material on state demographics, manpower availability, Site visit teams, including researchers for both the project s qualitative and quantitative components, then conducted 3-day site visits to each participating state in the spring of We developed a protocol for the site visits with specific questions and areas of inquiry for each category of respondent. During the site visit, the researchers met with representatives from four groups: state government officials; provider stakeholders; consumer and advocacy stakeholders; Final Report for Rebalancing Research Project, page 5

20 Rebalancing Research Project, Final Report and representatives from at least one local delivery sites. Site visits were focused on the State capital city. Three to four site visitors participated in each visit. After the site visits, we conducted follow-up telephone contacts to round out information or to interview individuals who were not available during the site visits. We prepared summary tables to show changes in supply of various services each year from 2000 to We also prepared table shells to track participants and expenditures by program for the same years; programs tracked included the Medicaid waivers, Medicaid state-plan LTSS services, state-funded LTSS services, as well as programs funded through federal transfers such as Older Americans Act programs, and transfers from the Department of Education. The intent was to get as much comparable information as possible so that we could graph overall trends in utilization and expenditure and trends for different subgroup of participants. We also analyzed data from the Nursing Home Minimum Data Set in each of the 8 States for the years 2000 to 2004 to profile the functional and cognitive characteristics of all residents admitted and residents who were in the nursing homes in that State for at least 6 months. Case Study Updates. For the second-year state update report covering the period from August 2005 to July 2006, we updated qualitative information through review of Web materials, and made telephone contacts with key informants in the States as needed, buttressed by in-person contacts at various national meetings. No site visits were performed for this update. Also we gathered an additional year of data from each State on expenditures and utilization of institutions, adding the year 2005 to our longitudinal profiling and to our MDS data on the acuity of nursing home residents. The focus of the 2006 update report was on change in context, organization, or services; on developments in the management approaches we were tracking; or on any new management approaches that the State had initiated. Final Report for Rebalancing Research Project, page 6

21 Rebalancing Research Project, Final Report Final State case studies. For the project s final state-specific reports, we again conducted site visits to each State; these occurred in November and December 2007 and each included at least two site visitors for a 2-day schedule. In addition to updating strategies we were following, these final site visits asked State officials to reflect on the goals, accomplishments, and management approaches over the entire period and next steps. The final case studies largely cover the period from August 2006 to December Topic Papers The Rebalancing Research included Topic Papers on cross-cutting themes relevant to rebalancing that drew on experience in the 8 States. After discussion with CMS, six topics for qualitative Topic Papers were selected, namely: State approaches to develop and sustain consumer advocacy; State organizational structures for rebalanced systems; the role of managed care in rebalanced LTSS systems; State approaches to enhance consumer decision-making about LTSS; the future of the nursing home in rebalanced LTSS systems; and community group residential settings in a rebalanced system and the extent to which States can ensure they are residential rather than institutional in nature. Each Topic Paper employed data collecting strategies suited to the particular topic, but we used a consistent approach across all six. We relied heavily on information gathered for the state-specific case studies as a backdrop for the work, supplemented by reviews of the literature, state websites and other primary and secondary source materials, and by telephone or in-person interviews of selected government officials and stakeholder representatives. Each Topic Paper is briefly summarized in the section on products of the study. Final Report for Rebalancing Research Project, page 7

22 Rebalancing Research Project, Final Report Quantitative Analyses for Chartbooks Research questions. Two remaining crosscutting topics were identified that required quantitative work: examination of total Medicaid costs for both LTSS and acute care for participants using HCBS services and participants using institutional services; and examination of case mix differences between participants using HCBS and institutional services. This work became expanded into what ultimately became the preparation of 6 Chartbooks. Using a variety of data sources (state enrollment files, utilization data from Medicaid and Medicare, and individual client assessment data from states) we addressed several research questions. Because the focus is on rebalancing, the analyses look separately at program participants who are covered by Medicaid HCBS waivers and community services in the Medicaid State Plans and those covered by institutional services in the Medicaid State Plans. The research questions were: 1. How do the utilization and cost of LTSS services (nursing facility, intermediate care facility [ICF], personal care, home health care and transportation) by Medicaid HCBS waiver participants and LTC state plan recipients differ across recipient groups and States? 2. How do the utilization and cost of medical services (hospital, emergency room, physician, physical therapy/occupational therapy/others, other practitioner, outpatient service, rehabilitation, hospice, other services, and pharmaceuticals) by Medicaid Home and Community-Based Services (HCBS) waiver participants, and state plan recipients receiving LTC services differ across recipient groups and States? 3. How do the utilization and Medicaid cost of these services differ for dual eligible HCBS recipients and recipients covered only by Medicaid? 4. How consistent is utilization of medical and LTC services across years? 5. How does utilization vary by participant characteristics? Study population. Our study population consisted of all Medicaid LTC recipients in each state during 2001, 2002, and CMS collects Medicaid enrollment and utilization data from states through its Medicaid Statistical Information System (MSIS). This data collection has only Final Report for Rebalancing Research Project, page 8

23 Rebalancing Research Project, Final Report recently allowed for specific waiver participants to be identified. To perform comparable analyses for the 8 States, we asked States to provide a finder file including all individuals who were eligible for a HCBS waiver at least at one point during a year and including all individuals who received an LTC service under the State Medicaid plan during a year. Specific waiver groups in each state were regrouped (based on their eligible population) into the following two waiver categories of interest: Aging and (Physical) Disability and Mental Retardation/Developmental Disability (MR/DD). 2 Our state plan groups of interest across eight states were limited to individuals who used nursing facility, intermediate care facility (ICF), home heath, and personal care services. Our study population includes individuals who are enrolled in a relevant Medicaid waiver or LTC state plan service, including dual eligible recipients, or those enrolled in both Medicaid and Medicare as a result of age or disability. We excluded from our study population those individuals identified as having end stage renal disease, (ESRD). Although they represent a small portion of the population (less than 1% across the eight states), their high utilization of services could skew the results. Therefore, these individuals, identified through diagnoses associated with their claims data, were excluded from our study population. Our analysis is limited to Medicaid enrollees (including dual eligible) in fee-for-service plans. Because reliable measures of utilization of services and their associated payment could not be obtained for Medicaid managed care enrollees, those covered by managed care were eliminated from this analysis. The number of person months in Medicaid managed care greatly 2 By the end of the study period, we found that some States used the term Intellectual Disabilities/Mental Retardation (ID/MR) rather than the more familiar Mental Retardation/Developmental Disability (MR/DD). Minnesota uses the federal terminology Mental Retardation/Related Conditions (MR/RC). Waiver programs for participants with MR/DD use a variety of names and acronyms. In this report, for consistency, we refer to MR/DD waivers and MR/DD as general terms. Final Report for Rebalancing Research Project, page 9